Cost of abatement

Different emissions paths involve different risks and costs.

Figure 9.1 illustrates possible paths that could stabilize at 550ppm CO2e (second from top), 500ppm CO2e and 450ppm CO2e (bottom line); the top black line is BAU. The 500ppm path could, if emissions kept on falling, eventually result in stabilization around 450ppm CO2e. Possible paths for stabilization at a given level are presented in the Stern Review (Stern, 2007, Figure 8.2, p226) - but all of them are a similar shape to those shown (if a path peaks later it has to fall faster). And if the carbon cycle weakens, the cuts would have to be larger to achieve stabilization at a given level (see Stern, 2007,

- 450 ppm CO2e

500 ppm CO2e (falling to 450 ppm CO2e in 2150)

550 ppm CO2e

---Business as usual

1 50

2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Source: adapted from Stern (2007, Figure 8.4, p233) Figure 9.1 Possible paths for the stabilization of greenhouse gases (GHGs)

- 450 ppm CO2e

500 ppm CO2e (falling to 450 ppm CO2e in 2150)

550 ppm CO2e

---Business as usual

Figure 8.1, p222). Broadly speaking, however, a path stabilizing at 550ppm CO2e or below will have to show emissions peaking in the next 20 years. For lower stabilization levels, the peak will have to be sooner. The magnitudes of the implied reductions between 2000 and 2050 are around 30 per cent for 550ppm CO2e, 50 per cent for 500ppm CO2e, and 70 per cent for 450ppm CO2e. Cuts relative to BAU are indicated in the figure.

On any emissions reduction path there are different mitigation options. At the start of the stabilization path there is great scope for energy efficiency and measures to slow/halt deforestation; with technical progress there will be (and some are there already) strong roles for different technologies in power and transport.

The cost of achieving these stabilization levels, if the world acts now, is relatively small, compared to the damages avoided. Both the bottom-up and the top-down studies in the Stern Review (Stern, 2007, Chapters 9 and 10, respectively) produced costs in similar ranges - around 1 per cent (between -1 and 3 per cent) of world GDP for stabilization below 550ppm CO2e. With hindsight and ever clearer evidence, 550ppm CO2e would be too high as a target: the risks look bigger than we estimated for the Stern Review. Concentrations should be held below 500ppm CO2e and, if possible, eventually brought down to no higher than 450ppm CO2e. The annual costs over the next few decades might be around 2 per cent of world GDP.

Bad policy, delayed decisions or incomplete participation could result in significantly higher costs. Stronger technical progress than anticipated could lead to lower costs. Assumptions about substitutability between different goods and options matter too. Since the Stern Review was published there have been a number of new studies, both bottom up and top down. Significant examples of the former are those from McKinsey (Enkvist et al, 2007) and the International Energy Agency (IEA, 2007), both of which indicated costs consistent or lower than the Stern Review. Similar conclusions on costs of action are drawn in the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC, 2007).

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